Wondering what to think about when buying your first home? You’re not alone.
The process for buying a first home in Sydney can be wrought with anxiety and even downright confusion. Before you even get to the paperwork, it’s best to consider if you’re ready to buy – even if you think you’ve found your dream property.
It seems everywhere you look, people are discussing the rising age of first home ownership. So much so, that many are left wondering if it’s a feasible option to consider in the next five or 10 years.
Before you get too disheartened, it’s worth taking the time to work through a beginner’s checklist for buying a house for the first time. This way, you’ll be able to fairly assess your priorities and how you might be able to proceed—whether you’re dreaming of established builds or the latest property developments.
Although it’d be great, your first home in Sydney probably won’t be huge. This is all part and parcel of getting a leg up on the property ladder at an early age. A few sacrifices in the short term can pay off handsomely when you look into what property development companies offer.
Rather than buying a big old home you might have to renovate, or buying further out, an inner city apartment can give you the foot in the door you need. A property like this can not only give you the amenities you need, but you can use any increase in equity as a deposit on another home later in life.
Be open to neighbourhoods you’ve never been to before, or those that sound unfamiliar. Extend your search, and consider what you really need in your first home – it doesn’t have to be your forever home, but it should be comfortable.
Assess Size & Location
Before you buy, you’ll need to consider what’s important to you.
If you’re planning to start a family, proximity to good schools and lots of green open space is always a plus.
For young professionals, access to public transport and nearby cultural hotspots are essential.
Property development companies assess all these factors before building a new site, which is why more young people than ever before are turning to the convenient urban lifestyle apartments offer.
Once you’ve outlined your priorities, you’ll be better placed to focus your search on suburbs that tick these boxes and are still in your price range. Don’t forget to spend time in these areas on the weekend. Ideally, spend time what you’d normally do, whether it be shopping, visiting friends or heading out to a bar.
You’ll also want to consider the size of the property you’re buying. The more bedrooms and bathrooms, the more a property is likely to be worth. If you’re intending to only spend the next 10 years in the property, it’s worth considering whether several bedrooms are necessary.
Another consideration is whether you would like to renovate the property. Its size and layout could dictate whether this is a viable option, however purchasing from property development companies has the benefit of not requiring any work at all.
Save For a Deposit
Saving for a deposit is only realistic once you have a firm grasp of the areas you’ll likely target, how many bedrooms and bathrooms you’d like, and if you want to renovate.
From here, you’ll need to consider your deposit amount. This can vary depending on the property developer, but the standard is 20% of the property value. It’s important to note that the deposit must be achieved after all other related costs have been factored. This includes government fees, stamp duty and legal fees.
A deposit below 20% often means you’ll be looking at lender’s mortgage insurance, however this additional fee is becoming more common for first home buyers wanting to buy immediately. Saving a deposit can take a substantial amount of time, so it’s worth seeking advice on whether this is in your interests.
Ideally, aim for slightly higher than 20%. By the time you’ve actually pulled together the deposit you need, the value is likely to have increased.
Find the Best Mortgage
The hard work isn’t over once you’ve saved your deposit.
The next step is finding the right home loan so you only pay the minimum you need to over the life of the loan. Shop around, speak to banks and brokers, and make sure your repayments are well within your means.
If you can’t afford the mortgage repayments in the event of an interest rate rise, you should reconsider whether your have found the right property development at the right price for your budget.
Luckily, we’ve helped outline your first steps to apply for a mortgage.
Research Your Grants
Before you sign on the dotted line, it’s worthwhile enquiring with property developers about any incentive schemes or grants you may be eligible for. Because the housing market has been increasingly difficult for millennials to enter, the NSW Government has sought to help out.
This means you could be eligible to receive the First Home Owners Grant for newly built property developments, and receive up to $10,000.
You might also be eligible for stamp duty exemptions when purchasing a new home up to the value of $650,000. Concessions are also available for properties valued between $650,000 and $800,000.
Property developers often have apartments selling within this price range, so it’s worth exploring developments in the area you’re looking at.